Correlation Between Gladstone Investment and VANGUARD FUNDS

Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and VANGUARD FUNDS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gladstone Investment and VANGUARD FUNDS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gladstone Investment and VANGUARD FUNDS PLC, you can compare the effects of market volatilities on Gladstone Investment and VANGUARD FUNDS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gladstone Investment with a short position of VANGUARD FUNDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and VANGUARD FUNDS.

Diversification Opportunities for Gladstone Investment and VANGUARD FUNDS

0.52

Correlation Coefficient

Gladstone Investment  VANGUARD FUNDS

Very weak diversification

The 3 months correlation between Gladstone and VANGUARD is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and VANGUARD FUNDS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VANGUARD FUNDS PLC and Gladstone Investment is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Gladstone Investment are associated (or correlated) with VANGUARD FUNDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VANGUARD FUNDS PLC has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and VANGUARD FUNDS go up and down completely randomly.

Pair Corralation between Gladstone Investment and VANGUARD FUNDS

Assuming the 90 days horizon Gladstone Investment is expected to generate 3.15 times less return on investment than VANGUARD FUNDS. But when comparing it to its historical volatility, Gladstone Investment is 1.59 times less risky than VANGUARD FUNDS. It trades about 0.09 of its potential returns per unit of risk. VANGUARD FUNDS PLC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  5,563  in VANGUARD FUNDS PLC on May 7, 2025 and sell it today you would earn a total of  369.00  from holding VANGUARD FUNDS PLC or generate 6.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.92%
Values	Daily Returns

Gladstone Investment  vs.  VANGUARD FUNDS PLC

Gladstone Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Gladstone Investment is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

VANGUARD FUNDS PLC

Risk-Adjusted Performance

Good

Over the last 90 days VANGUARD FUNDS PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unfluctuating fundamental indicators, VANGUARD FUNDS may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Gladstone Investment and VANGUARD FUNDS

The main advantage of trading using opposite Gladstone Investment and VANGUARD FUNDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, VANGUARD FUNDS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in VANGUARD FUNDS will offset losses from the drop in VANGUARD FUNDS's long position.

The idea behind Gladstone Investment and VANGUARD FUNDS PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.